U.S. holiday sales may rise 3.9% as shutdown curbs sentiment

Focus on Value

In addition to the political uncertainty, consumers are contending with a 2 percentage-point increase in the payroll tax and rising mortgage rates, after the Federal Reserve signaled in May that it was prepared to start phasing out its monthly bond purchases this year.

While lower-income households have restrained purchases this year because of the increase in payroll tax, Shay said shoppers at all income levels this season will focus on value, whether in the form of discounts, quality or service.

Many retailers, from Macy’s Inc. to Nordstrom Inc. to Wal- Mart Stores Inc., missed second-quarter sales estimates and cut forecasts as consumers preferred to spend on bigger items like cars and home-related products.

The NRF’s projected increase in holiday sales compares with an estimated gain of 3.4% by the International Council of Shopping Centers last month, up from 3% in 2012. Deloitte LLP has projected sales may increase as much as 4.5% for November to January, led by non-store sales from online and catalog retailers, in line with the gain for last year.

Shorter Season

Earlier in September, Chicago-based researcher ShopperTrak said sales in stores may advance 2.4% over the holidays, the smallest increase since 2009 as customers visit fewer stores. Customer traffic in November and December may decline 1.4% from the same period a year earlier, ShopperTrak also said.

To draw in shoppers, retailers may begin offering promotions as early as Nov. 1 this year to take advantage of a shorter holiday season, according to the researcher.

This year, there are 25 days between the day after Thanksgiving -- known as Black Friday -- and Christmas, compared with 31 days in 2012, and four instead of five weekends. Sales in November and December account for 20% to 40% of U.S. retailers’ annual revenue, according to the NRF.

Challenger, Gray & Christmas Inc., a Chicago-based employment consulting firm, has a more pessimistic view on holiday hiring by U.S. retailers, projecting a decline of about 6.9% this year amid shaky consumer confidence and as stores implement more efficient practices reducing demand for seasonal workers. Retailers will hire about 700,000 temporary staff, down from 751,800 last year, which was a 12-year high, the firm said last month.

Some retailers have begun announcing holiday hiring plans. Wal-Mart said in September that it would boost holiday hiring to 55,000, a 10% increase from last year. Target Corp. has said it would take on about 70,000 workers, 20% fewer than a year earlier.

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